Cable Vets Tout New Anti-Piracy Chip (Exclusive)

BBT Secure Microchip - H 2013

BBT Secure Microchip - H 2013

Beyond Broadband Technology, founded by four industry insiders, has a patent for a password-free system without the need for third party validation and without paying royalties to big companies.

Beyond Broadband Technology, a small private company founded by a quartet of cable industry veterans, has been granted a patent it claims promises a relatively simple, inexpensive solution to the problem of how to deliver entertainment content and data securely over the Internet, broadband or wireless to consumers.

If it catches on, the technology promises success where much larger companies have spent millions without finding a workable solution. 

“It provides a totally secure communications path,” says Steve Effros, one of the BBT partners and a former president of the Cable Telecommunications Association, and more recently a cable industry analyst and consultant. “The individual user controls their own security.”

PHOTOS: 10 Highly Paid Entertainment CEOs

The chip doesn’t involve software, which has proven all too easy to hack. It uses what is called a “downloadable conditional access system,” or DRM (digital rights management), with its hardware specifically designed so only a licensed user can access the content.

“This downloadable hardware approach enables a whole new level of security,” says Bill Bauer, a veteran cable operator who is CEO of BBT and chief technical officer. “It’s what anyone manufacturing devices or distributing electronic data communications has needed for a long time – an open system diverse parties can use to protect data and intellectual property.”

Besides Effros and Bauer, the owners of BBT are Tony Swain (COO) and Ben Hooks (CFO). Each of the four founders have operated small cable TV systems.

Here's how it works: A distributor or company sends the content or data to a consumer or company by wired line, the Internet or over the air. The consumer downloads the movie, medical record or whatever kind of data is sent into a cable box, TV, computer, game system or even bank, scientific or industrial databases.

PHOTOS: 81 of Fall TV's Biggest Stars

An inexpensive pre-programmed computer chip inside the device receives the download and provides the only authorization needed. Even the person receiving it doesn’t need a password. (Companies that require extra security can, in fact, set a password -- anything from letters and numbers to a fingerprint or eye-print.)

By contrast, every system used since the 1970s -- when cable first needed a secure way to deliver Hollywood movies and other copyrighted content -- until now involves what the industry calls a “trusted source” for authorization. That means a “public/private key” is used to authenticate the legitimacy of the secure connection And that's been a much-reported target of hackers.

The BBT “core” patent (meaning it is very broad), comprising 202 individual claims, appears to be the first that doesn’t require a trusted authority or public/private key.

An outside expert given access to the BBT system says it appears to be a real innovation. “It is a fundamental step forward,” says Jim Turner, the former technical director of ATIS, an organization that sets standards for such technical systems.  “It’s what everyone has been looking for, and it appears to have a lot of applications.”

The technology would also allow BBT to sidestep pricey proprietary interest issue charges, in place since the first systems developed beginning 1970s. A handful of companies have dominated generation after generation of secure delivery technology – Motorola (now owned by Arris), Scientific Atlanta (now part of Cisco) and NDS Inc. (also acquired by Cisco).  

PHOTOS: 25 of Fall's Most Anticipated Movies

BBT’s is not a manufacturer. It is providing an open system it plans to license to cable tech providers, chip and hardware manufacturers, consumer electronics companies and others. And they're claiming a big price advantage. BBT's proposed  pricing for a cable box system, which includes the technology on a chip, goes for only $5 per unit.

That compares to about $35 for a cable card system, the technology mandated at present by the FCC for cable systems. The cable card came out of a requirement in the 1996 Telecommunications Act that required development of a safe, universal secure system that would be available to all users.

Effros says BBT met with the FCC in 2007 and showed them their planned system and was given permission to move forward. He says they are free to deploy at any time.

To test the technology, Bauer founded a company called Digital Freedom Technology (DFT) that is making cable boxes using BBT chips. Effros says it has passed an audit by Telcordia Technologies (formerly Bell Labs) and is being tested by some small cable systems and an industry group in Denver.

Effros says they have intentionally withheld the technology from the market while awaiting the patent. “Now, given the security stuff that is going on,” says Effros, “there is a much wider group of companies needing to know about this. Now we can begin to tell these folks there is a new way to deal with this type of security that doesn’t require a ‘trusted authority.’”

“Were ready to prove what we’ve done is unique and nobody has done it before,” adds Effros, “It exists and it is in secure microchips and the implications are very interesting.”